"They said they would be fishing over three million square kilometres. off the Australian coast," said the foundation's chief executive, Allan Hansard. "It turned out to be one-tenth of that area, around the coastline where we fish."

Recreational fishers say the trawler's 16,500-tonne quota of mackerel and redbait targets prime food for the bigger fish they want to catch, such as tuna.

Mr Hansard said they had tried to negotiate with the trawler's Small Pelagic Fishery Industry Association to keep it out of areas of concern for the first 12 months, but were snubbed.

"The failure of the talks to make real progress on key issues means that the nation's five million recreational fishers will now look to other avenues to have their concerns addressed.

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"Australia's recreational fishing community is worth $10 billion to Australia's economy annually, far exceeding the total value of commercial fishing," he said." We deserve to be taken seriously on this issue."

The breakdown follows the departure of the Geelong Star from the port city last weekend with a net modified in an attempt to avoid more of the eight dolphin and four seal kills that ended its first two voyages.

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The net has a barrier mesh at its mouth to prevent dolphins entering, and acoustic pingers to alert them to the net's presence, according to the industry association's chairman, Grahame Turk.

Mr Turk said the association and the operators shared community concern about harm to dolphins and they had made a "considerable investment" in new technology aimed at reducing risks.

New rules, such as a ban on night fishing and a requirement to leave a fishing zone if one dolphin was killed, meant Geelong Star was operating in the most tightly regulated mid-water trawl fishery in Australia, Mr Turk said in a statement.

According to the Australian Marine Conservation Society, the barrier mesh on the trawl net is untested globally and acoustic pingers have been shown not to work.

"We have very limited confidence in these changes," said the society's campaigner, Tooni Mahto. "We are quite sure the vessel shouldn't be fishing."